PSA weakened by gov't attacks, chairman tells paper
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Asked whether he feared a hostile takeover bid at PSA, Thierry Peugeot said: "Everything is possible, so we have to act." |
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PARIS (Reuters) -- Government criticism of PSA/Peugeot-Citroen's planned cutbacks have weakened the French automaker and even left it vulnerable to hostile takeover bids, Chairman Thierry Peugeot said in an interview with Le Figaro.
"We're prepared to accept criticism, but there are limits," Peugeot told the French daily, responding to suggestions by government figures, including President Francois Hollande, that the company had lied about its plans.
"The attacks that the company has suffered have an immediate effect on [investor] perceptions," he was quoted as saying, referring to PSA's share price decline following the July 12 announcement of 8,000 job cuts and a plant closure.
Asked whether he feared a hostile takeover attempt, the chairman added: "Everything is possible, so we have to act."
The shares fell 18 percent in four days of trading amid mounting criticism of the restructuring plan, before recovering some of their losses on Wednesday and Thursday.
Restructuring plans
PSA has said it will post a net loss in the first half and a 700 million-euro ($857.5 million) operating loss for the core carmaking division. Its manufacturing operations are burning 200 million euros a month, with cash flow not expected to turn positive until 2015, the company said.
The automaker's CEO Philippe Varin said the company will unveil a plan to reduce capital expenditure when it presents financial results on July 25.
PSA has already embarked on a number of cost-cutting measures this year, including announcing plans to close its Aulnay plant in northern France, shed thousands of jobs and sell a majority stake in its profitable Gefco logistics unit.
In February, PSA entered into a strategic alliance with General Motors in which the U.S. carmaker took a 7 percent stake to become the second-largest shareholder after the Peugeot family. The two plan to cooperate on purchasing and vehicle development to help lower costs. PSA also sold 1 billion euros in new stock to existing shareholders this year.
Asset disposals thus far have included the Citer vehicle-rental unit that the carmaker sold to Enterprise Holdings Inc. on Feb. 1 for 440 million euros and an agreement announced April 2 to sell PSA's 48-year-old headquarters building in Paris to Ivanhoe Cambridge for 245.5 million euros.
The Peugeot family has the largest shareholding in PSA with a 25.4 percent stake which commands 38.1 percent of voting rights.
Industry Minister Arnaud Montebourg had also criticized the company's decision to pay out dividends last year on 2010 earnings, saying that Peugeot family members had "a number of things to explain to us."
Montebourg is scheduled to meet Thierry Peugeot on July 26, according to French government sources.
Automotive News Europe contributed to this report
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